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Charles Dharapak/APActing Social Security Commissioner Carolyn W. Colvin
WASHINGTON -- After spending nearly $300 million on a new computer system to handle disability claims, the Social Security Administration still can't get it to work. And officials can't say when it will.

Six years ago, Social Security embarked on an aggressive plan to replace outdated computer systems overwhelmed by a growing flood of disability claims. But the project has been racked by delays and mismanagement, according to an internal report commissioned by the agency.

Today, the project is still in the testing phase, and the agency can't say when it will be operational or how much it will cost.

In the meantime, people filing for disability claims face long delays at nearly every step of the process -- delays that were supposed to be reduced by the new processing system.

"The program has invested $288 million over six years, delivered limited functionality, and faced schedule delays as well as increasing stakeholder concerns," said a report by McKinsey & Co., a management consulting firm.

Hitting the Reset Button

As a result, agency leaders have decided to "reset" the program in an effort to save it, the report said. As part of that effort, Social Security brought in the outside consultants from McKinsey to figure out what went wrong.

They found a massive technology initiative with no one in charge -- no single person responsible for completing the project. They issued their report in June, though it wasn't publicly released.

As part of McKinsey's recommendations, Acting Social Security Commissioner Carolyn Colvin appointed Terrie Gruber to oversee the project last month. Gruber had been an assistant deputy commissioner.

"We asked for this, this independent look, and we weren't afraid to hear what the results are," Gruber said in an interview Wednesday. "We are absolutely committed to deliver this initiative and by implementing the recommendations we obtained independently, we think we have a very good prospect on doing just that."

The revelations come at an awkward time for Colvin. President Barack Obama nominated Colvin to a full six-year term in June, and she now faces confirmation by the Senate. Colvin was deputy commissioner for 3½ years before becoming acting commissioner in February 2013.

The House Oversight Committee is also looking into the program, and whether Social Security officials tried to bury the McKinsey report. In a letter to Colvin on Wednesday, committee leaders requested all documents and communications about the computer project since March 1.

The letter was signed by Rep. Darrell Issa, R-Calif., chairman of the Oversight committee, and Reps. Jim Jordan, R-Ohio, and James Lankford, R-Okla. They called the project "an IT boondoggle."

The troubled computer project is known as the Disability Case Processing System, or DCPS. It was supposed to replace 54 separate, antiquated computer systems used by state Social Security offices to process disability claims. As envisioned, workers across the country would be able to use the system to process claims and track them as benefits are awarded or denied and claims are appealed.

Project Adrift

But as of April, the system couldn't even process all new claims, let alone accurately track them as they wound their way through the system, the report said. In all, more than 380 problems were still outstanding, and users hadn't even started testing the ability of the system to handle applications from children.

"The DCPS project is adrift, the scope of the project is ambiguous, the project has been poorly executed, and the project's development lacks leadership," the three lawmakers said in their letter to Colvin.

Maryland-based Lockheed Martin was selected in 2011 as the prime contractor on the project. At the time, the company valued the contract at up to $200 million, according to a press release.

McKinsey's report does not specifically fault Lockheed but raises the possibility of changing vendors and says Social Security officials need to better manage the project.

Gruber said Social Security will continue to work with Lockheed "to make sure that we are successful in the delivery of this program."

Steve Field, a spokesman for Lockheed Martin (LMT), would only say that the company is committed to delivering the program.

Nearly 11 million disabled workers, spouses and children get Social Security disability benefits. That's a 45 percent increase from a decade ago. The average monthly benefit for a disabled worker is $1,146.

Brink of Insolvency

The report comes as the disability program edges toward the brink of insolvency. The trust fund that supports Social Security's disability program is projected to run out of money in 2016. At that point, the system will collect only enough money in payroll taxes to pay 80 percent of benefits, triggering an automatic 20 percent cut in benefits.

Congress could redirect money from Social Security's much bigger retirement program to shore up the disability program, as it did in 1994. But that would worsen the finances of the retirement program, which is facing its own long-term financial problems.

Social Security disability claims are first processed through a network of field offices and state agencies called Disability Determination Services. There are 54 of these offices, and they all use different computer systems, Gruber said.

If your claim is rejected, you can ask the state agency to reconsider. If your claim is rejected again, you can appeal to an administrative law judge, who is employed by Social Security.

It takes more than 100 days, on average, to processing initial applications, according to agency data. The average processing time for a hearing before an administrative law judge is more than 400 days.

The new processing system is supposed to help alleviate some of these delays.

Cost of living -- 114.1

State tax burden -- 8.4 percent

Median house price -- $377,625, per Zillow.com

Climate -- 69/39 January, 105/75 July

Traffic congestion -- Didn't make the Forbes list

Scottsdale is a retirement mecca, with a reasonable cost of living, state and local taxes well below the national average, a great quality of life and plenty of amenities. But housing costs are nearly double the national average. Winters are warm, but summers are sizzling hot. Peak temperatures can reach close to 120 degrees -- after all, it's in the desert. The locals will dismiss it as "dry heat," but that kind of heat will still send your electric bill for air conditioning soaring, and can necessitate you buying new cars more frequently than you'd like.

Key West offers Caribbean weather in the U.S., an attribute that makes it a natural choice for retirees. And who could resist the Jimmy Buffett-Parrot Head thing, especially once you're living a life of leisure?

You might be better off if you resist. The cost of living is 30 percent higher than the U.S. average, and housing costs at least twice as much. Travel is another issue. Key West is the most remote location in the continental U.S. The only road off the 6-square-mile island is the Overseas Highway, a 127.5-mile causeway that is largely one lane in each direction.

Hurricanes -- all too common in Florida -- are rare in Key West -- though Wilma did hit it in 2005. But when they do impact the island, though, it's worth noting that the city has the Atlantic Ocean on one side and the Gulf of Mexico on the other, and there's no part of it that's more than 18 feet above sea level. So homeowners must pay several thousand dollars a year for hurricane insurance.

As big California cities go, San Diego is a bargain. But compared to the rest of the country, San Diego is certified high-cost. Yes, the weather is near perfect year-round. But the cost of living is one-third higher than the rest of the country, and house prices are nearly 2½ times the national average. Add in California's high state and local tax rates and the earthquake issue, and San Diego should be crossed off your list of potential retirement cities.

Can you imagine a more idyllic place to retire than Honolulu? Probably not. But as beautiful as it is, it shares many of the financial strains common to other cities on this list, plus a few more.

The overall cost of living is second only to New York City. After all, most of the goods people need have to be shipped across thousands of miles of ocean. The state tax burden is only slightly higher than the national average, but the median house price is triple the national average.

Finally, as far as cost of living is concerned, Honolulu has an unusual financial issue: travel expenses. Sooner or later, you'll want to get away from Hawaii. And there's no cheap way to escape from this paradise.

San Francisco frequently makes those "favorite cities in America" lists and for good reason. Situated on a peninsula between the Pacific Ocean and the San Francisco Bay, it is one of the most scenic cities in the world. Mild weather year-round, world class cuisine, charming neighborhoods and an eclectic population make it one of the most desirable places to live anywhere in the world.

But it has the highest median house prices in the country, which should scare off retirees. Its cost of living trails only New York City and Honolulu. And like the rest of California, its state and local tax burden is second only to New York.

One other reason people might avoid living in San Francisco is that it's prone to earthquakes. While that's certainly a concern for personal safety, few people from non-earthquake prone areas realize how it increases your cost of living. Homeowners need to pay several thousand dollars per year for earthquake insurance.

State/district tax burden -- 4.0 percent on first $10,000 and up to 8.95 percent on income greater than $350,000 in D.C.,10.2 percent in Maryland, 9.3 percent in Virginia

Median house price -- $395,000

Climate -- 43/29 January, 88/71 July

Traffic congestion -- 10th worst gridlock in U.S.

Washington is centrally located, is filled with historic attractions and has some of the most beautiful neighborhoods in the country. It also has one of the highest effective local income tax rates in the country. The district taxes the first $10,000 of income at 4 percent, then 6 percent to $40,000, then 8.5 percent on all income over $40,000 (you can exempt up to $3,000 in retirement income).

Like other cities on this list, Washington sports a high cost of living and some of the highest housing prices in the country. The area also has its share of toll roads, and traffic is a recurring problem. This is especially troublesome during the holidays and summer months. Interstate 95 -- which bisects the metro area -- is the principal travel corridor between the Northeast and Florida. Making traffic matters worse: the near-permanent road construction projects.

As recently as the 1970s, Los Angeles was widely viewed as the city that all America was looking to move to -- or at least to imitate. Perfect weather, endless beaches, palm tree-lined streets, plentiful housing, a powerhouse economy and the lure of rubbing elbows with a celebrity or two. Today, about the only things L.A. has going for it are near-perfect weather and In-N-Out Burger. The rest is mostly a faded memory. The city's success was, in fact, a key contributor to its decline: The near-doubling of the metro population since the 1970s has created East Coast levels of human congestion.

Property values are higher than New York's and nearly twice those of Chicago. The state and local tax burden in California is second only to New York, and the overall cost of living in L.A. is more than one-third higher than the national average. California's unfunded pension liabilities are nearly as high as those in Illinois, threatening serious tax increases that could squeeze retirees. Nagging quality of life issues include the worst traffic congestion in the nation and smog that could lead to higher medical costs.

Boston is the quaintest large city in America, sporting centuries-old but impeccably maintained architecture, neighborhoods and surrounding communities that just ooze with charm and close access to the beaches of Cape Cod and the mountains of Vermont and New Hampshire. If Boston were a less expensive place to live, it could well be an popular and smart retirement destination.

But it isn't. The high cost of living and high housing prices are the main reasons cited by former residents for leaving the state. The state tax burden is higher than the national average; the cost of living is about one-third higher than the national average; and house prices are nearly double the U.S. median. Translation: a large chunk of your retirement income would be spent just covering basic living expenses.

Based on the numbers, Chicago wouldn't seem to be the retirement financial disaster that other cities on this list are. The state tax burden is only slightly higher than the national average; the cost of living is tolerably higher than the U.S. average; and house prices -- while higher than the nation in general -- are downright affordable compared to the coastal cities.

However, in addition to being a generally more expensive place to live than the nation at large, the area faces burgeoning problems just over the horizon. Illinois faces the highest unfunded pension obligations of any other state in the country, at around $100 billion. Chicago faces a nation-leading $20 billion unfunded pension liability. Such deficits scream out for higher taxes across the board. We can only speculate as to which taxes will be raised (or created).

The area has fantastic amenities -– theater, music, concerts, festivals, ethnic foods, diverse and quaint neighborhoods and close access to beaches and mountains. It also has probably the most comprehensive public transportation system in the U.S. But it breaks down spectacularly when it comes to the costs. The area has close to the highest cost of living in the country, which gets markedly worse the closer you are to Manhattan. House prices are out of sight, particularly in the more desirable communities and neighborhoods. New York State has the highest state and local tax burden in the country. New Jersey has the highest real estate tax burden in the country. And nearby Connecticut isn't much better.

Weather runs from winter-time deep freezes to protracted summer heat waves. The preponderance of bridges, tunnels and their tolls -- as well as antiquated roads running through quaint town centers -- makes congestion a constant problem, even on the weekends.

How much house can I afford

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Palak Mishara

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How about if the government penalizes the contractors working on the project, instead of throwing more truckloads of taxpayers' money at it. Force the contractors to fix their own problems at their own expense...not the government's. The government should have been using a finished product long ago. No more excuses from this totally incompetent Adminstration that can never get the job done. Obama said he was going to get rid of the Wall Street good old boy networks and the way they do business with D.C. ... Well, Lockheed Martin is most definitely one of the good old boys; and, the Social Security Adminstration is definitely part of D.C.! If the good old boy network can't get the job done, including the "new" good old boy networks that Obama has added to the old good old boys; break them up...and, that goes for the good old boy "protection associations," too; and the Congress that purposely writes loopholes, ambiguities, and vagueness into the legislation for appropriations financing these projects...and, let's not forget about our equally infamous Supreme Court Justices, all obviously lacking the Wisdom of Solomon, that will try the lawsuits!

Incompetent at your work? If you're in private business, you're going to lose your job. In government, you may get promoted! This is not a problem in government, if they need another system (computer), they'll just buy a different one (still no guarantee it'll work) with your tax money. Welcome to BIG government!

Sorry folks-----This "Social Security's $300 Million IT Project Doesn't Work" is not on my radar. You can say I am very fixated on comprehensive trade, tax and immigration policies.

All I know is when you change computer systems especially like humongous computer systems like the one by SS will have some glitches. May be I am using this site to vent my frustrations but I am always hoping the best for America and for all AmericansAt the end of the day --- I have no enemies and I am happy with myself

When you install a new computer system you will have issues until the interfaces are made totally compatible and software glitches are addressed.-----just take a break and inhale----calm down---take your meds!!

So you really don't know examples of voter suppression? Closing polling places early, reducing the number of polling places especially in heavily populated areas, reducing the number of polling workers, reducing the time for polling, reducing the early voting time, mal-functioning computers at polling places? purging voter lists, disqualifying votes (just like hanging chad)-----------------